The new Biogen sounds risk-averse

Biogen, now four months into the tenure of its latest CEO, will soon have a new board chair and a corporate strategy that appears to prize practicality over high-risk science.

The news is that Stelios Papadopoulos, Biogen's colorful long-time chairman who has reached the company's mandatory retirement age, will be replaced by Caroline Dorsa, who has served on the board since 2010. As RBC Capital Markets analyst Brian Abrahams wrote in a note to clients, it could be telling that Biogen chose Dorsa, who spent her career on the finance side of business, over the many MDs and PhDs on the company's board, a move "in keeping with the shift towards becoming more streamlined and financially efficient."

Meanwhile, at this week's TD Cowen investor conference in Boston, Biogen CEO Chris Viehbacher told analysts that while the company's history of taking big swings in Alzheimer's disease and multiple sclerosis has produced some powerful medicines, it has also created a pipeline that skews toward scientific risk. The future, Viehbacher said, will look more balanced.

Markets

Wall Street is betting on Morphic

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Morphic Therapeutic, a biotech company with an investigative drug for autoimmune disease, has had little in the way of news in 2023. And yet its stock price has nearly doubled since Jan. 1, reflecting Wall Street's escalating confidence that MORF-057, the company's lead drug, can make a difference for patients with ulcerative colitis.

At some point next quarter, Morphic will report data from an open-label Phase 2 study testing whether MORF-057 can improve patients' scores on a measure of ulcerative colitis severity. Success in this study, the thinking goes, will improve MORF-057's odds in a later pivotal trial and point to future success in the related indication of Crohn's disease.

What's unclear is why investors are so much more confident today than they were three months ago. One possible explanation: In February, two of Morphic's existing investors — the biotech fund EcoR1 and scientific founder Timothy Springer — bought $100 million worth of shares in a private placement. But this wasn't one of the deals where investors get a privileged peak at blinded data, meaning Springer and EcoR1 don't know have any information on MORF-057 not in the public domain.

Drug Pricing

Why don't gene therapies come with warranties?

The advent of one-time therapies for devastating diseases has set in motion a byzantine scramble to figure out how to pay their seven-figure price tags. The drug industry has embraced outcomes-based agreements, a complex system of rebates to compensate payers when gene therapies don't work, but a much simpler solution could involve embracing the humble rebate.

Writing in STAT, Emad Samad argues that those outcomes-based arrangements can be easily gamed by drug companies, and their payouts are likely to get consumed by the pharmaceutical middlemen who negotiate prices.

A warranty, by contrast, would go directly and in full to payers. And, under new federal rules, it wouldn't count against the manufacturer as a reduction in price, thereby preserving the company's bargaining position in pricing negotiations.

Read more.

Politics

Pfizer's CEO maxed out his donation to Dr. Oz

Pfizer CEO Albert Bourla made the maximum possible campaign contribution to Mehmet Oz in his failed bid for the U.S. Senate, supporting a candidate who has repeatedly peddled medical misinformation on his daytime TV show.

As STAT's Rachel Cohrs reports, Bourla gave Oz $2,900, the maximum allowed for an individual, on Aug. 12, the same day that the Democratic-led House of Representatives passed the Inflation Reduction Act. Bourla's only other individual contribution was to Sen. John Thune of South Dakota, who serves as the Senate Republican whip. The rest of his campaign spending was funneled through Pfizer's PAC.

Oz's race, which he lost to Sen. John Fetterman, was a must-win for Republicans trying to flip an evenly divided Senate. Bourla's contribution came as the drug industry fought against Democrats' proposed reforms to the country's pharmaceutical pricing landscape.

Read more.

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